Equifax Quarterly Consumer Credit Demand Index: September 2022

  • Overall consumer credit applications increased (+17.1% vs September quarter 2021)
    • Credit card applications grew (+31.5% vs September quarter 2021)
    • Personal loan applications up (+22.0% vs September quarter 2021)
    • Buy now pay later applications increased (+9.9% vs September quarter 2021)
    • Auto loan applications reduced (-3.8% vs September quarter 2021)
  • Mortgage applications declined (-6.1% vs September quarter 2021)

SYDNEY – 31 October 2022 – Consumer credit demand experienced a significant increase in the September quarter, up +17.1% compared to the same period last year. The uptick was driven by surging growth in unsecured credit, according to the latest Equifax Quarterly Consumer Credit Demand Index (September 2022).

Released today by Equifax, the global data, analytics and technology company and leading provider of credit information and analysis in Australia and New Zealand, the index measures the volume of credit applications for credit cards, personal loans, buy now pay later and auto loans.

Credit card demand was a major driver of the overall growth, up 31.5% in Q3 2022 versus the same period 2021, while personal loan applications also saw strong growth (+22.0%).

Kevin James, General Manager Advisory and Solutions, Equifax, said: “As the cost of living increases and the impact of interest rate rises starts to hit home for many Australians, the buffer of household savings consumers accumulated over the past few years is starting to erode. In light of this, some consumers may be turning to unsecured credit to help them bridge the gap.

“According to Equifax data, demand for both credit cards and personal loans was highest in NSW, Victoria and the ACT. House prices in these states climbed rapidly during the pandemic, and many mortgage holders who bought at the top of the market haven’t had time to pay down their loans or build equity. This cohort is likely to be among the first to feel the pinch as interest rates rise.”

Mortgage demand declined -6.1% in Q3, continuing the downward trend that began earlier this year. Demand was down in all states except Western Australia and South Australia, which saw marginal increases. The steepest declines were seen in NSW, ACT and Tasmania.

Demand for buy now pay later eased in Q3, but was still up +9.9% compared to the same quarter 2021.

“The changing market perception of the buy now pay later sector, driven by ongoing turbulence and regulatory discussions, may have contributed to softer growth in demand this quarter. Additionally, consumers have had more opportunity to shop in ‘bricks-and-mortar’ stores this year when compared to Q3 2021, and may choose different payment options when shopping in-person versus online,” said James.

Auto loan applications declined in the September quarter, down 3.8% compared to the same period in 2021. 

TABLE 1: Consumer Credit Demand by State (VS same quarter 2021)

Mortgage Demand

IMAGE 1: Consumer Macro Credit Demand – Quarterly YOY

IMAGE 2: Consumer Credit Applications – Indexed by Type

*Low volumes

^The data has been re-indexed from 2018 to account for the recent inclusion of Buy Now Pay Later applications:
Re-indexed data to commence in 2018 (previously 2015)
Added buy now pay later and auto loan credit enquiries as a separate trendline (previously rolled up into personal loans)

ABOUT EQUIFAX INC.
At Equifax (NYSE: EFX), we believe knowledge drives progress. As a global data, analytics, and technology company, we play an essential role in the global economy by helping financial institutions, companies, employers, and government agencies make critical decisions with greater confidence. Our unique blend of differentiated data, analytics, and cloud technology drives insights to power decisions to move people forward. Headquartered in Atlanta and supported by more than 14,000 employees worldwide, Equifax operates or has investments in 24 countries in North America, Central and South America, Europe, and the Asia Pacific region. For more information, visit www.equifax.com.au or follow the company’s news on LinkedIn.

FOR MORE INFORMATION
mediaenquiriesAU@equifax.com

NOTE TO EDITORS
The Quarterly Consumer Credit Demand Index by Equifax measures the volume of credit card, personal loan applications, Buy Now Pay Later and auto loan applications that go through the Equifax Consumer Credit Bureau by financial services credit providers in Australia. Credit applications represent an intention by consumers to acquire credit and in turn spend; therefore, the index is a lead indicator. This differs to other market measures published by the RBA which measure credit provided by financial institutions (i.e. balances outstanding).

DISCLAIMER
Purpose of Equifax media releases:
The information in this release does not constitute legal, accounting or other professional financial advice. The information may change, and Equifax does not guarantee its currency or accuracy. To the extent permitted by law, Equifax specifically excludes all liability or responsibility for any loss or damage arising out of reliance on information in this release and the data in this report, including any consequential or indirect loss, loss of profit, loss of revenue or loss of business opportunity. 
 

 

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